(a) In computing tax, there may be deducted from the measure of tax the following items:
Terms Used In Tennessee Code 67-4-711
Bail: Security given for the release of a criminal defendant or witness from legal custody (usually in the form of money) to secure his/her appearance on the day and time appointed.
Business: includes any activity engaged in by any person, or caused to be engaged in by the person, with the object of gain, benefit, or advantage, either direct or indirect. See Tennessee Code 67-4-702
Commissioner: means the commissioner of revenue or the commissioner's duly authorized assistants, except as otherwise provided in this part. See Tennessee Code 67-4-702
Gross sales: means the sum total of all sales under this part as defined in this section, without any deduction whatsoever of any kind or character, except as provided in this part. See Tennessee Code 67-4-702
merchandise: means any consumer item that is or is represented to be new or not previously owned by a consumer, and "temporary premises" means any public or quasi-public place, including a hotel, rooming house, storeroom, building or part of a building, tent, vacant lot, railroad car or motor vehicle that is temporarily occupied for the purpose of exhibiting stocks of merchandise to the public. See Tennessee Code 67-4-702
Retailer: means any person primarily engaged in the business of making retail sales. See Tennessee Code 67-4-702
Sale: includes the furnishing of any of the things or services taxable under this part. See Tennessee Code 67-4-702
Sales: means all gross receipts of the taxpayer not allocated under this part. See Tennessee Code 67-4-2004
Seller: means every consignee, bailee, factor or auctioneer having either actual or constructive possession of tangible personal property, or having possession of the documents of title to tangible personal property, with power to sell such tangible personal property in the consignee's, bailee's, factor's or auctioneer's own name and actually so selling, is deemed the seller of such tangible personal property within the meaning of this part. See Tennessee Code 67-4-702
State: means any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States and any foreign country or political subdivision thereof. See Tennessee Code 67-4-2004
Statute of limitations: A law that sets the time within which parties must take action to enforce their rights.
taxpayer: means every corporation, subchapter S corporation, limited liability company, professional limited liability company, registered limited liability partnership, professional registered limited liability partnership, limited partnership, cooperative, joint-stock association, business trust, regulated investment company, REIT, state-chartered or national bank, or state-chartered or federally chartered savings and loan association. See Tennessee Code 67-4-2004
Wholesaler: means any person primarily engaged in the business of making wholesale sales. See Tennessee Code 67-4-702
written: includes printing, typewriting, engraving, lithography, and any other mode of representing words and letters. See Tennessee Code 1-3-105
(1) Cash discounts allowed and taken on sales;(2) The proceeds of the sale of goods, wares, or merchandise returned by the customer when the sale price is refunded either in cash or by credit;(3) The amount allowed as trade-in value for any article sold;(4) Amounts representing the difference between the remaining amount due on the selling price of tangible personal property sold on a security agreement and five hundred dollars ($500), when the wholesaler or retailer actually repossesses the property sold pursuant to the terms of the security agreement;(5)(A) Amounts actually paid during the business tax period by a contractor to a subcontractor holding a business license or who is licensed by the state board for licensing contractors for performing the activities described in § 67-4-708(4)(A). For a contractor to be eligible to claim the deduction, the contractor must provide, on a form prescribed by the commissioner, the name, address and business license or contractor’s license number of the subcontractor and the amount subcontracted. The contractor also must maintain in its records a copy of the subcontractor’s business license or license issued by the board for licensing contractors;(B) This subdivision (a)(5) shall apply only to new contracts issued sixty (60) days after July 1, 2009. Contracts issued before that date shall be subject to this subdivision (a)(5) as it existed immediately prior to July 1, 2009;(6) The sale of any service that is delivered to a location outside this state;(7) The proceeds of the sale of school supplies and meals to students and school employees on campus by elementary and secondary schools; provided, that the proceeds of all sales of such items by private independent contractors shall not be deducted; and(8)(A) A deduction from gross receipts shall be allowed for bad debts arising from receipts on which the tax imposed by this chapter was paid;(B) Any deduction taken that is attributed to bad debts shall not include interest;(C) For purpose of calculating the deduction, a “bad debt” is as defined in 26 U.S.C. § 166. However, the amount calculated pursuant to 26 U.S.C. § 166 shall be adjusted to exclude:
(i) Financing charges or interest;(ii)Sales or use taxes charged on the purchase price;(iii) Uncollectible amounts on property that remain in the possession of the seller until the full purchase price is paid;(iv) Expenses incurred in attempting to collect any debt; and(v) Repossessed property;(D) The deduction provided for by this subdivision (a)(8) shall be deducted on the return for the period during which the bad debt is written off as uncollectible in the claimant’s books and records and is eligible to be deducted for federal income tax purposes. For purposes of this subdivision (a)(8), a claimant who is not required to file federal income tax returns may deduct a bad debt on a return filed for the period in which the bad debt is written off as uncollectible in the claimant’s books and records and would be eligible for a bad debt deduction for federal income tax purposes if the claimant was required to file a federal income tax return;(E) If a deduction is taken for a bad debt and the debt is subsequently collected in whole or in part, the tax on the amount so collected shall be paid and reported on the return filed for the period in which the collection is made;(F) When the amount of bad debt exceeds the amount of gross receipts for the period during which the bad debt is written off, the taxpayer may file a refund claim and receive a refund pursuant to § 67-1-1802. The statute of limitations for filing the claim shall be measured from the due date of the return on which the bad debt could first be claimed.(b) In computing tax, there may be deducted from the measure of tax the following taxes; provided, that such deductions may be claimed only by the taxpayer who made direct payment to the applicable governmental agency and, in addition, by all subsequent vendees of such taxpayer licensed under this chapter to do business in the state:
(1) Federal excise taxes imposed on beer, gasoline, motor fuel and tobacco products;(2) Tennessee gasoline tax, compiled in chapter 3 of this title;(3) Tennessee motor vehicle fuel use tax, compiled in chapter 3 of this title;(4) Tennessee tobacco tax, compiled in part 10 of this chapter;(5) Tennessee beer taxes, compiled in title 57, chapters 5 and 6;(6) Special tax on petroleum products, compiled in chapter 3, part 9 of this title;(7) Taxes that are required to be passed on to the consumer by the Retailers’ Sales Tax Act, compiled in chapter 6 of this title, or by title 57, chapter 4, relative to sale of alcohol for on-premises consumption, should be excluded from the gross sales reported on the business tax return, but such taxes passed on to the consumer may be deducted from the gross sales reported, if such taxes are included in gross sales on the business tax return;(8) Liquefied gas tax, compiled in chapter 3, part 11 of this title; and(9) Taxes that are required to be collected by a bail bondsman pursuant to part 8 of this chapter shall be excluded from the gross sales reported on the business tax return, but such taxes collected by the bail bondsman may be deducted from the gross sales reported if such taxes are included in gross sales on the business tax return.
